The 3 Most Important Things to Know about Apple's Q3 2016
It’s that time of the year again. The time when Apple reports its quarterly financial results. In this case, the results for its fiscal 2016 third quarter (Q3) that ended on June 25, 2016.
Since going over a list of numbers is definitely a bore, let’s take a quick look at the main things you need to take away from Apple’s Q3 2016.
1. Revenue and net income are down (yet again)
Apple reported revenue of $42.4 billion and quarterly net income of $7.8 billion for its Q3 3016. That is, without a doubt, a lot of money. But it’s less than how much Apple reported in the year-ago quarter. For its Q3 2015, Apple reported revenue of $49.6 billion and net income of $10.7 billion.
The same thing happened in Q2 2016. Apple reported revenue of $50.6 billion and net income of $10.5 billion for Q2 2016. A decrease, compared to revenue of $58 billion and net income of $13.6 billion in the year-ago quarter.
So to sum it up, this is the second quarter when Apple reports declining revenue and net income.
"We are pleased to report third quarter results that reflect stronger customer demand and business performance than we anticipated at the start of the quarter," said Tim Cook, Apple’s CEO. "We had a very successful launch of iPhone SE and we’re thrilled by customers’ and developers’ response to software and services we previewed at WWDC in June."
2. Apple sold more than 40 million iPhones (which isn’t much)
In Q3 2016, Apple sold 40.39 million iPhones (and 9.95 million iPads, as well as 4.25 million Macs). That’s a lot less sold iPhones compared to Q2 2016 and the year-ago quarter. In Q2 2016, Apple sold 51.1 million iPhones. And in Q3 2015, Apple sold 47.53 million iPhones.
So just like revenue and net income, iPhone sales are declining.
Which brings up the question: "is there anything that isn’t declining?" Yes, yes there is. Services are up 19% compared to the year-ago quarter, bringing in $5.97 million in Q3 2016 compared to $5.02 million in Q3 2015.
"Our Services business grew 19 percent year-over-year and App Store revenue was the highest ever, as our installed base continued to grow and transacting customers hit an all-time record," said Luca Maestri, Apple’s CFO. "We returned over $13 billion to investors through share repurchases and dividends, and we have now completed almost $177 billion of our $250 billion capital return program."
3. Apple will definitely open retail stores in India (sometime)
During Apple’s Q3 2016 earnings call, CEO Tim Cook confirmed that the company is going to open retail stores in India. At present, only authorized resellers can offer iPhones and iPads in India. Apple wants to open its own, official stores in the country and thus cut out the middleman. But so far, Apple hasn’t been able to do so.
"India is now one of our fastest growing markets. In the first three quarters of this fiscal year, iPhone sales in India were up 51 percent year-on-year," he said. "We're looking forward to opening retail stores in India down the road and we see huge potential for that vibrant country."
Since going over a list of numbers is definitely a bore, let’s take a quick look at the main things you need to take away from Apple’s Q3 2016.
1. Revenue and net income are down (yet again)
Apple reported revenue of $42.4 billion and quarterly net income of $7.8 billion for its Q3 3016. That is, without a doubt, a lot of money. But it’s less than how much Apple reported in the year-ago quarter. For its Q3 2015, Apple reported revenue of $49.6 billion and net income of $10.7 billion.
The same thing happened in Q2 2016. Apple reported revenue of $50.6 billion and net income of $10.5 billion for Q2 2016. A decrease, compared to revenue of $58 billion and net income of $13.6 billion in the year-ago quarter.
So to sum it up, this is the second quarter when Apple reports declining revenue and net income.
"We are pleased to report third quarter results that reflect stronger customer demand and business performance than we anticipated at the start of the quarter," said Tim Cook, Apple’s CEO. "We had a very successful launch of iPhone SE and we’re thrilled by customers’ and developers’ response to software and services we previewed at WWDC in June."
2. Apple sold more than 40 million iPhones (which isn’t much)
In Q3 2016, Apple sold 40.39 million iPhones (and 9.95 million iPads, as well as 4.25 million Macs). That’s a lot less sold iPhones compared to Q2 2016 and the year-ago quarter. In Q2 2016, Apple sold 51.1 million iPhones. And in Q3 2015, Apple sold 47.53 million iPhones.
So just like revenue and net income, iPhone sales are declining.
Which brings up the question: "is there anything that isn’t declining?" Yes, yes there is. Services are up 19% compared to the year-ago quarter, bringing in $5.97 million in Q3 2016 compared to $5.02 million in Q3 2015.
"Our Services business grew 19 percent year-over-year and App Store revenue was the highest ever, as our installed base continued to grow and transacting customers hit an all-time record," said Luca Maestri, Apple’s CFO. "We returned over $13 billion to investors through share repurchases and dividends, and we have now completed almost $177 billion of our $250 billion capital return program."
3. Apple will definitely open retail stores in India (sometime)
During Apple’s Q3 2016 earnings call, CEO Tim Cook confirmed that the company is going to open retail stores in India. At present, only authorized resellers can offer iPhones and iPads in India. Apple wants to open its own, official stores in the country and thus cut out the middleman. But so far, Apple hasn’t been able to do so.
"India is now one of our fastest growing markets. In the first three quarters of this fiscal year, iPhone sales in India were up 51 percent year-on-year," he said. "We're looking forward to opening retail stores in India down the road and we see huge potential for that vibrant country."
